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Iron Ore Prices Dip Amid Heightened Market Oversight Caution from China

CHINA: The iron ore market witnessed a downward trajectory on Monday, halting its longest stretch of weekly gains since January, as Beijing’s stern warnings regarding increased market supervision to curb price escalations reverberated through the industry. Fast markets reported a decline in the benchmark 62% Fe fines imported into Northern China, plunging by 0.94% to $133.48 per ton. China’s state planner made a significant announcement on Monday, revealing a comprehensive survey conducted on price indices of various commodities, including steel, iron ore, and lithium. The objective is to uphold a healthy and stable market environment, signaling a rigorous stance toward market regulation.

The Pricing Monitoring Centre of the Development and Reform Commission (NDRC) clarified that this decision aims to deepen their understanding of price compilation methods, data collection processes, and the intricate price release system across multiple agencies. This initiative follows two prior warnings from the NDRC issued last week, explicitly emphasizing reinforced supervision on the iron ore market to counteract an ongoing price surge.

The iron ore prices have soared by approximately 30% since August, primarily fueled by optimistic sentiments surrounding anticipated stimulus measures in the property sector. Market observers had pinned their hopes on China’s recently announced 1 trillion yuan ($140 billion) debt issuance, anticipating a positive impact on the steel market through increased affordable housing initiatives. Jiang Mengtian, an analyst at Horizon Insights, an independent research firm based in China, highlighted the precarious nature of the current valuation of both steel and raw materials. Mengtian stressed that sustaining the upward momentum in the fourth quarter necessitates more robust policy maneuvers.

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